PF iCEV Personal Financial Planning Test Review

Question 1

Employer-sponsored benefit plans providing workers with a chance to put some of their earnings in a financial portfolio.

Accepted Answer

401K plan

Question 2

CDs are similar to savings accounts because of which of the following?

Accepted Answer

they accrue interest

Question 3

If income exceeds expenses, which of the following is recommended?

Accepted Answer

Research investment and savings options

Question 4

Allow users to withdraw and deposit money at anytime, used for daily expenses; usually free.

Accepted Answer

checking accounts

Question 5

Budgets assist in reorganizing finances to reduce ________ or increase ________.

Accepted Answer

Debt; savings

Question 6

__________ explains how a person changes financial position, earnings, consumption & savings throughout the life cycle.

Accepted Answer

Family life cycle

Question 7

Which of the following accurately describes stocks?

Accepted Answer

Investments providing ownership of public companies

Question 8

Assist in planning financial situations thru the year; acts as a control mechanism in regards to the way money is spent.

Accepted Answer

budgets

Question 9

Similar to savings accounts but has higher interest rates, fixed terms and a fixed interest rate.

Accepted Answer

certificate of deposit

Question 10

Which of the following is NOT true of a Roth IRA?

Accepted Answer

Applies a 10% tax penalty on any withdrawals made before the age of 59.5

Question 11

Short-term goals cover a time period of one to two years.

Accepted Answer

false

Question 12

Savings accounts are like money market accounts because of which of the following?

Accepted Answer

They have a limited number of withdrawals

Question 13

Earn interest over time, but have limited number of transfers and withdraws allowed.

Accepted Answer

savings accounts

Question 14

After creating his budget, John realized his expenses exceed his income. How can John resolve this problem?

Accepted Answer

Eat out less frequently

Question 15

Because the family life cycle changes, goals require which of the following?

Accepted Answer

Constant updating

Question 16

The family life cycle helps marketers define which of the following?

Accepted Answer

Target market

Question 17

Focal point of developing a personal financial plan; need to have a set of priorities & a target date for achievement.

Accepted Answer

goals

Question 18

How many categories are there of the family life cycle?

Accepted Answer

Eight

Question 19

Allow individuals to open an account & begin saving funds toward retirement w/tax benefits; can be traditional or Roth.

Accepted Answer

individual retirement accounts

Question 20

Anyone can open a 401K savings plan.

Accepted Answer

false

Question 21

Mutual funds can be described as which of the following statements?

Accepted Answer

Are professionally managed

Question 22

Common stock differs from preferred stock in which of the following ways?

Accepted Answer

Voting rights

Question 23

CDs are a common way to save money & are offered by most financial institutions. In this instance, CD stands for

Accepted Answer

Certificate of deposit

Question 24

A budget helps prevent debt by detailing which of the following?

Accepted Answer

Identifying shortages before they happen

Question 25

Investment in publicly traded companies; provides ownership in a company; can be common or preferred.

Accepted Answer

stocks

Question 26

A ________ account has a higher rate of return, but a __________ account has a lower required minimum balance.

Accepted Answer

Money market; savings

Question 27

Budgeting finances requires calculating __________ and __________.

Accepted Answer

Income; expenses

Question 28

Unlike Roth IRAs, traditional IRAs have which of the following characteristics?

Accepted Answer

Has tax benefits

Question 29

Explains how a person changes financial position, earnings, consumption and savings throughout the life cycle.

Accepted Answer

family life cycle

PF iCEV Personal Financial Planning Test Review

Questions 29

PF iCEV Personal Financial Planning Test Review

Questions 29